Dakuku Peterside’s appointment as head of the country’s principle maritime agency has already seen the sector play a bigger role in helping improve Nigeria’s economic fortunes. Francis Ezem reports
With vast a coastline in excess of 850km, an Exclusive Economic Zone (EEZ) of 300,000 square km and more than 3,000km of navigable inland waterways, Nigeria is a richly endowed maritime nation. In terms of coastal shipping resources, the country’s River Niger is the third longest river in Africa with well over 1,271km of navigable water and attendant huge potential for transportation. In terms of infrastructure, it has a number of important seaports and inland container ports.
Located in the hydrocarbon-rich Gulf of Guinea, the country is also the world’s sixth largest exporter of oil, with crude output of more than 2.4 million barrels per day at peak periods. With such a profile, Nigeria has all it takes to make a significant impact on the global shipping arena. But the country has been unable to properly harness this and the industry is largely dominated by foreigners due to the lack of skilled domestic labour. Statistics from the Nigerian National Petroleum Corporation (NNPC) indicate that the country imports about 1,260 metric tonnes of petrol each month, lifted almost exclusively by foreign companies as would-be competitors locally lack the required capacity to do so.
The liquidation of the indebted Nigerian National Shipping Line in 1995 turned out to be a huge setback, with the country no longer having a single ship to its name. To help overcome this glaring deficiency, the federal ministry of transport is working towards re-floating a national carrier under a private sector-driven arrangement with a Singapore consortium, a deal that would give Nigeria a 60 per cent equity.
While maritime administration is undertaken by the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Ports Authority (NPA) is the technical regulator. It also oversees channel management and other harbour services including allocation of berths for ships. The Nigerian Shippers Council, which traditionally protects shippers’ cargo interests, also plays the dual role of regulating freight, fees, port tariffs and charges on imported cargo, while the Nigeria Customs Service oversees cargo inspection and services associated with licensing and regulation of chandelling, licensing of cargo clearing agents and border administration tasks in conjunction with other security agencies.
Meanwhile, the Maritime Academy of Nigeria, located in Oron, Akwa Ibom State, is in charge of training shipboard officers and ratings as well as shore-based management staff. Before it was set up in 1977 with the help of the International Maritime Organisation and the United Nations Development Programme, training was carried out in the UK India and Sweden. The institution is currently being upgraded to degree level. Furthermore, in an attempt to emulate the Philippines, which supplies more than 30 per cent of the world’s seafarers, Nigeria launched the Nigerian Maritime University in Okerenkoko in Delta State last year.
The country’s lop-sided economy means that crude oil accounts for more than 98 per cent of its total exports while non-oil products account for just two per cent, with both depending on the smooth functioning of the maritime sector to get things moving. In an attempt to improve efficiency, the federal government embarked on a major reform programme in 2003 that saw private terminal operators take over the job of cargo handling in all 26 terminals across the country’s eight seaports. Hitherto, the NPA played the dual roles of cargo handling and technical regulator.
One of the main aims of the privatisation exercise was to reduce both lengthy ship turnaround time and cargo dwell time, a situation that saw shipping firms increasingly taking their business to neighbouring countries. Although Nigeria accounted for more than 65 per cent of consumer goods imported from Europe, America and Asia into West Africa, its seaports handled less than 20 per cent of imports. Overall, the reform programme wanted to reverse this and establish Nigeria as the maritime hub for West and Central Africa. The other objective was to attract private sector investment to develop port infrastructure, thus relieving the government of a hefty financial burden.
The new era got underway in 2006 and although there have been a number of improvements in some areas of port operations, especially in terms of reducing turnaround and dwell times, experts are divided as to whether the reforms have been a resounding success. Statistics for the first quarter of 2018, released recently by the NPA via the Nigeria Port Consultative Council, show a decline in container traffic, which stood at 387,016 total equivalent units (TEUs) representing a decrease of 7.1 per cent when compared to the 416,806 TEUs handled in the same period of 2017. Shipping traffic also witnessed a slip with 985 ships calling at the ports, a decrease of 2.3 per cent in the same period of the previous year. Gross registered ship tonnage also saw a 2.8 per cent drop from the 32.6 million metric tonnes recorded in the same period of 2017 to 31.7 million metric tonnes in 2018.
Given the uncertainties in the global oil market, the federal government is looking towards harnessing the potential of other sectors of the economy, particularly agriculture, as laid out in the Economic Recovery and Growth Plan (ERGP). This means further priming the maritime industry. As part of these efforts, President Muhammadu Buhari has appointed Dakuku Peterside as director general of the Nigerian Maritime Administration and Safety Agency (NIMASA), the industry’s apex regulatory body charged with supervising a number of key areas, including maritime safety and security, ship registration, pollution control, and registration of shipping companies and agencies. Established in 2007, the agency also seeks to promote domestic shipping development and building Nigeria’s tonnage.
Appointed in 2016, Peterside was given a clear-cut mandate to “reform, restructure and reposition” NIMASA to enable the maritime sector to better take up the challenge of the government’s economic diversification programme. The resulting three-year Medium Term Strategic Growth Plan, covering 2016-2019, covers core functions of the agency like survey, inspection and certification as well as promotional initiatives, among them increasing indigenous tonnage and shipbuilding.
There have also been attempts to decentralise NIMASA’s operations. More than 75 per cent of offshore shipping activities take place outside of the country’s commercial hub of Lagos, where the agency has its administrative headquarters. In a bid to avoid the cumbersome situation whereby a Port Harcourt or Warri-based ship owner has to travel to Lagos for routine documentation tasks or bill payments, the agency recently approved the building of offices in Port Harcourt for the new eastern zone and in Warri for the central zone.
Another milestone has been the upgrading of the nation’s subscription to the Lloyd’s list, which now guarantees unfettered access to up-to-date data in the maritime industry. In addition, as part of NIMASA’s digital transformation programme, online undertakings can be more easily carried out alongside highly sophisticated security measures. The fact that stakeholders are able to register their vessels at the click of a button has already boosted the nation’s shipping register. The agency has also taken steps to ensure that indigenous shipping companies benefit from the Coastal and Inland Shipping Cabotage regime, particularly in terms of the lifting of crude oil. To this end, it has been working with the Nigerian National Petroleum Corporation and other stakeholders to work out ways how this could be best done, even if it is on the basis of forming joint ventures with well-established foreign tanker vessel operators.
Recently, the agency reviewed the granting of waivers under the cabotage regime as laid out in the 2003 Cabotage Act, which has been seen to lean too much in favour of international oil companies. Peterside is now urging them to draw up a five-year plan to stop applying for cabotage waivers and to start using of Nigeria-owned vessels for marine contracts. He said: “Nigeria’s laws forbid foreign vessels operating in her territorial waters save for compliance with the Cabotage Act. We also want to increase the number of Nigerians who participate in the marine aspect of your business and we are working closely with the Nigerian Content Development and Monitoring Board to have a joint categorisation of vessels operating under the Cabotage Act in order to ensure the full implementation of the Act.”
In NIMASA’s bid to grow the industry,Peterside added, it would not hesitate to wield its powers where necessary, although it did not wish to be confrontational: “The mandate we have is that of the Nigerian people, to grow shipping for our economic benefits. In this way, we urge you to cooperate and collaborate with us where necessary so that we can have an all-inclusive maritime industry.”
Last year NIMASA launched the first of its annual forecasts to help guide investors in the industry, which it projects as having a five per cent across-the-board growth. In 2018 as well, the agency took delivery of its multi-million dollar modular floating dockyard in Lagos, believed to be the fifth largest in Africa, as part of measures to stem the tide of capital flight in the country, given that most ships operating in the country are dry docked abroad due to the absence of such a facility in Nigeria.The project was initiated in 2013 but was moth-balled due to non-payment. Built by one of the world’s largest ship building firms, Damen of Netherlands, the dockyard has a length of 125m and breadth of 35m and is fitted with three inbuilt cranes, transformers and a number of ancillary amenities. It is currently being operated by a private company in partnership with the agency.
Developing a skilled and motivated workforce is a cardinal policy of the agency’s current management team. This partly accounts for its decision to promote more than 300 of its senior staff. In the light of this policy, NIMASA has given impetus to the Nigerian Seafarers Development Programme geared especially towards seafarer training, both for the local industry and export. More than 298 cadets have since started work on merchant vessels in the UK and Egypt for their one- year mandatory sea-time training, as required by the International Maritime Organisation.The agency is meanwhile concluding talks with the United Arab Shipping Line to train 100 Nigerian cadets.
“NIMASA is taking necessary steps to ensure that there are no gaps in the industry, especially as it concerns needed human capacity. The… agency is making serious headway in creating sea time for the over 2,000 graduates of the programme,”, Peterside said in a recent interview in Lagos. The current management has also made strides in terms of developing an institutional framework for ensuring greater safety and security in the sector, especially with a view to curbing piracy, crude oil theft and kidnapping. The new security architecture includes an Anti-Piracy Bill, which if enacted would make Nigeria the first African country to have such legislation. NIMASA has meanwhile ensured effective implementation of the International Ships and Ports Facility Security Code as the designated agency for the country for the implementation of the code. At present, there has been more than 80 per cent compliance around the country following strong arm intervention that involved shutting down port facilities owned by those unwilling to observe the new regulation.l